The opening of a new American-owned factory in Algeria would tend to increase Algeria's GDP more than it increases Algeria's GNP because
A)some of the income from the factory accrues to people who do not live in Algeria.
B)gross domestic product is income earned within a country by both residents and nonresidents,whereas gross national product is the income earned by residents of a country while producing both at home and abroad.
C)all of the income from the factory is included in Algeria's GDP.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The opening of a new American-owned factory in Algeria would increase Algeria's GDP because GDP measures the total value of goods and services produced within a country's borders, regardless of who owns the production. However, GNP measures the income earned by residents of a country, including income from abroad. Since some income from the factory goes to non-residents, it contributes more to GDP than GNP.

The Opening of a New American-Owned Factory in Algeria Would